Canada's mining industry strong, but challenges ahead
MAC's Pierre Gratton highlights mining industry's needs to remain competitive
MONTREAL, April 17, 2013 /CNW/ - In a keynote address to the Montreal Council on Foreign Relations, Pierre Gratton, President and CEO of the Mining Association of Canada (MAC), stressed the importance of keeping Canada's mining industry competitive for the benefit of both Quebec and Canada at large.
"Canada is currently a global mining powerhouse and its economic contributions reach far beyond the mine gate and the communities where we operate by providing high-paying jobs and spinoff business opportunities across the country," said Gratton. "However, our current leadership status should not be taken for granted as mining investment dollars are highly mobile and global competition for it is fierce."
As the third largest mining region in Canada, Quebec has been an important part of this growth, but the province has recently lost ground in relative terms. Gratton noted that Quebec doubled the value of its mineral production over the past decade, but other provinces like British Columbia, Saskatchewan and Newfoundland and Labrador have tripled, quadrupled and even sextupled the value of mineral production over the same period.
"I am concerned that mining growth in Quebec may fall off significantly due to the present policy direction of the government," said Gratton in relation to the expected tabling of new mining tax legislation by the Quebec government that could see high royalties and taxes placed on mining companies operating in the province. "Quebec should be aiming to maintain its status as a sophisticated mining jurisdiction, one that understands that tax instability and higher royalties will drive away investment, economic development and employment."
By many accounts, Canada is one of the largest mining countries in the world. For example, the Toronto Stock Exchange (TSX) and the TSX Venture Exchange are home to 58 per cent of the world's public mining companies. Canada is a top five producer of uranium, potash, nickel, platinum, aluminum, diamonds, zinc and steel-making coal. Moreover, our nation's reputation for being rich in resources led to Canada landing the top spot for attracting world exploration spending in 2011 at 18 per cent.
Canada's mineral production in the last two years surged to new heights. In 2011, mineral production value reached a record $50.3 billion. It declined in 2012 to $46.9 billion due to some softening in the commodity market, but this figure essentially represents a return to the previous peak set in 2008.
From a Canada-wide perspective, a largely positive outlook for mineral and metal prices over the long term supported by China and other emerging markets underscores the opportunities before Canada. However, for Canada to be able to seize these opportunities, it must remain competitive.
In his speech, Gratton stated that Canada must work to keep its competitiveness by:
- Maintaining low inflation, reducing debts, and preserving and improving competitive tax levels.
- Staying the course as a free trader and proactively engaging the emerging markets, especially China.
- Improving the regulatory framework for mining projects, while keeping environmental protection a top priority.
- Addressing the looming skills crisis in the mining sector, which is estimated at requiring 145,000 new workers over the next decade to replace retirees and fill new positions.
- Investing in critical infrastructure to support new mining projects, including key transportation needs such as ports, all-weather roads and rail.
"To maintain our leadership, we also have to remain leaders in responsible mining and act in a way that Canadians have confidence in. If we keep doing things right with our wealth of resources, Canadians will continue to thrive through the development and production of new mines here in Canada, the continued growth of our industry abroad, and the numerous spinoff economic and social benefits that flow from both," said Gratton.
For a copy of Pierre Gratton's speech, please visit www.mining.ca.
The Mining Association of Canada is the national organization for the Canadian mining industry. Its members account for most of Canada's production of base and precious metals, uranium, diamonds, metallurgical coal, mined oil sands and industrial minerals and are actively engaged in mineral exploration, mining, smelting, refining and semi-fabrication. Please visit www.mining.ca.
SOURCE Mining Association of Canada (MAC)